Can Victoria afford itself?

By Gene Miller, December 2012

City Hall seems tone-deaf to the urgency of looming fiscal concerns.

Remember when Langford and Colwood—now backbones of the recently re-branded “Westshore”—were known as Dogpatch?

Seems like that page turned.

Now there’s an embedded impression that you can have a house and small yard in Langford for the price of a condo in Victoria; and in spite of the occasional rumblings in the national media about a coming major correction in real estate prices, nobody who’s selling in pricey Fairfield, James Bay, or the other central area blue-chip neighbourhoods has received the memo.

Years back, hearing that we could buy a three-bedroom home in Moose Jaw for $65,000, we could, while sitting in our restored Moss Street 1912-ers say between sips of ruby-toned Shiraz, “Be my guest.” The prices have changed (even the Shiraz is more expensive), and the facts are that the housing cost differential between Westshore and the rest of Victoria is less noticeable, but the market perception now favours the idea that Moose Jaw is just twenty minutes up the Island Highway.

All of this speaks to the roiling tectonics in our region’s economy, changes complex and far-reaching; and because we’re all standing in the river as it carves a new course, nobody can be sure where this is headed. But studying the trend lines, would it be too blunt to ask: What are the odds of Victoria waking up dead?

Worries that the region’s economic centre-point is moving away from downtown are, unfortunately, just one layer in a shit sandwich that also includes an ever-expanding list of major capital projects for which Victoria has almost no money or plan, and a weak and risk-laden world economy (Victoria is not immune). The Canadian Press recently noted: “A report from Accenture said demands for public services will outpace Canada’s economic growth over the next 13 years, leaving all levels of government unable to provide public services at present-day standards.”

As a local taxpayer, businessperson, engaged citizen, ask yourself: do the words caution, discipline and reinvention have any relevance in this conversation?

Infrastructure. Yes, this is a thudding, dull topic, but the point is, the stuff ages and wears out. Doesn’t matter whether we’re talking about the plumbing, cabinets, floor coverings or appliances in your home or city drains, pavement, sewers, firehalls, community centres and swimming pools…or blue bridges, for that matter. So, here’s the poser: What does it mean to say that the City of Victoria—a city with an annual budget approaching $200 million—has at least three-quarters of a billion dollars in unfunded capital projects? More pointedly, so this doesn’t seem too abstract, where’s the money going to come from for that seismic upgrading of the Yates Street firehall at a cost of $15-17 million? Or renovation/retrofitting of the Crystal Pool at $22.5 million; or the Johnson Street Bridge replacement at $90-100 million (even with $37.5 million from the Feds and gas tax funds); or a new wastewater treatment system requiring the City’s share of $800 million; or a $60 million new central library? Or seismic and functional upgrades of City-owned buildings at $40-50 million? Or renovation of parkades? Or?

Since the City, which funds its annual budget largely from property taxes and various fees and transfers, spends almost all of its annual income on day-to-day operating costs, how much long-term borrowing to cover the costs of the big capital items can be heaped on taxpayers? Or to ask the same question more uncomfortably, is it possible, as the regional economy shifts and if the city’s economy softens, that the scale of municipal services and the level of amenities we’re accustomed to can no longer be afforded? Or alternatively, that a lot of maintenance and renovation will have to be deferred, pushing the City increasingly into a position of lurching from crisis to trouble-spot to imperative? Blue Bridge is falling down. Oops! (A little birdie tells me you can kiss the Crystal Pool good-bye, by the way.) 

Is it a reasonable line of thought, then, that current service and amenity levels in Victoria may have developed during times and economic conditions that simply no longer exist? And if this is true, what does the City do? During the so-called Great Recession that began in 2007, many US cities, faced with looming financial crises, eliminated amenities and drastically curtailed services, even essential ones. They cut to the bone with a chain saw. Some cities went bankrupt. Life in such places has become kind of nasty. Clearly, diminution, contraction at the city level is not the stuff of myth. It happens in the here and now.

It isn’t easy to assemble definitive information about the state of Victoria’s fiscal health. A lot depends on interpretation and nuance, and the believability of various financial snapshots and projections. Remember, the recipe for most performance projections is equal parts data, spin and prayer. 

I’ve reviewed data that states that Victoria will of all municipalities in the region be the highest in debt per capita when the new Johnson Street Bridge debt is added. But the real story, I’m informed, is that not only are we facing skyrocketing debt, but that the municipality is not required to know its infrastructure/deficit liability, report on it, or prepare plans to address it. One commenter calls it the “sleeping disaster;” another described it as a “set of land mines.” 

An asset management plan has been a Victoria Council priority since 2009, but no substantial progress has been made to-date. It appears instead that the City is handling its major capital challenges as one-off “squeaky wheel” projects, meaning that attention to needs is being delivered in a vacuum, or a series of silos—something analogous to moving the dimples around an under-inflated volleyball.

Obliged to align its new Official Community Plan with a five-year plan for asset management, Victoria appears to have treated the requirement as little more than a formality. Ironically, the new OCP is intended to shepherd land use planning for 30 years, not 5. 

You will search the pages of this recently minted Official Community Plan in vain in an effort to find extensive, comprehensive, rigorous, long-range thinking and strategizing about the City as an economic entity, compared to a land-use entity. The document leaves you with the impression that “planning” is largely taken by the City to mean where the next park or 15-storey building will go. And you may then want to ponder a really obvious question: How could the City, in mounting and funding a nearly four-year planning process, invest so much of its (and our) resources—time, energy, money and social capacity—in land-use thinking with so little attention, effort, and expertise dedicated to the study of our financial prospects and future, even though this will powerfully influence land-use potentials, the City’s ability to deliver services, the range and condition of amenities and, of course, taxes?

The costs of the gold-plated “iconic” bridge—and the associated size of the taxpayer burden—are still unknown. Pricey renovations to City Hall continue. And both the costs and cost-handling strategy of the stormwater (not wastewater) utility and much more remain both uncertain and un-strategized.   

By any measure, the City has done a poor job of initiating a candid and informed conversation with citizens and economic stakeholders—likely because the City itself doesn’t have a holistic or integrated picture of the challenge, or a coherent response, and because there is a substantial amount of political whistling in the dark going on. Evidence suggests that the City is nowhere near integrating all of these needs, setting priorities within affordable limits, or proposing a strategy for funding massive capital undertakings.

Rumours tumble out of City Hall both that senior staff is stalling or sugar-coating the reality of capital requirements, or baffling council with bullshit, and that much of council itself has remained tone-deaf to the urgency of these looming fiscal concerns. Consequently, citizens and stakeholders have no way of understanding the City’s assumptions; and if it can be said that council is elected in part to be a steward of the future, it’s a mystery at the moment as to what future Victoria City council envisions. 

Is it possible that the City has been neither skillful nor strategic concerning municipal finance? Let’s ask: Will the city’s economy be robust? Will property values (and assessments) remain stable? Are downtown businesses optimistic or planning to cut, run or fold? (Chapters Books, by the way, will not be renewing its lease on Douglas Street and, if rumours are true, will be heading to Uptown Shopping Centre). Will provincial employment levels fall as “virtual government” expands? Are the city’s seniors (higher than the regional average) financially resilient, or clipping coupons? What are the implications as the city’s stock of rental housing ages (60 percent of Victorians rent)? Will senior governments be able to sustain financial partnerships, or will there be more walkaways and downloading? Will there be a continued shift of economic energy to the suburbs? If yes, then with what consequences? Can tourism be sustained, given the crappy global economy?

Answers and even advised best guesses to these and other questions need to be woven into a macroeconomic Victoria narrative that people can understand, and without the jive and body English made famous by the City’s legendary “consultations.” The City’s future literally depends on it.

Gene Miller, founder of Open Space Cultural Centre, Monday Magazine and the Gaining Ground Conferences, is currently writing Massive Collaboration: Stories That Divide Us, Stories That Bind Us and The Hundred-Mile Economy: Preparing For Local Life.